The Covid-19 pandemic is costing the UK 292 billion euros. This is evidenced by a recent study by the Center for Economics and Business Research (CEBR).
The damage to the UK economy from the Coronavirus crisis in 2020 is roughly the same as the GDP of Scotland (about 200 billion euros) and Wales (about 80 billion euros) added together: a big free economy blowing up.
Significant regional differences
Not every region within the UK has been affected to the same extent. For example, the losses in London are the largest in absolute terms, at 59.7 billion euros. But in relative terms, the metropolitan area is much less affected. In London’s key sectors – such as finance and services – it was easy to work remotely, meaning the lockdowns had a relatively less impact on the regional economy.
In other parts of the United Kingdom, the losses were relatively higher. For example in the Midlands and eastern England, where retail and wholesale are an important part of the regional economy. These sectors have been hit hard by the various shutdowns, in part due to the prolonged closure of many stores and all cafes and restaurants.
The losses in Scotland and Wales are also relatively higher. The researchers say: “Differences in Corona policies within the constituent countries of the United Kingdom could explain why Scotland and Wales, among others, suffered relatively significant damage during the Corona crisis.”
Despite this misery, CBRE expects the UK economy to recover in the next twelve months and return to its pre-Coronavirus level. However, researchers suggest to the UK government that the crisis may widen existing differences in prosperity between UK regions. “If the government does not act, some areas will disproportionately shoulder the impact of the epidemic.”
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The Coronavirus hit comes on top of the Brexit crisis. In the past eighteen months, nearly 300 banking and financial institutions have moved from the United Kingdom to the European Union. However, more than 1,000 billion euros in British assets have flowed out of the country, members of the New Financial Thinking Center say, based on research.
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